Wells Fargo & Co. is cutting 638 mortgage employees as the nation’s largest home lender contends with a slowdown in the business. Fifty-three workers in Colorado Springs are among those being dismissed.
“After carefully evaluating market conditions and consumer needs, we are reducing to better align with current volumes,” Wells Fargo spokesman Tom Goyda said in an emailed statement.
As interest rates rise, Wells Fargo is contending with the end of a refinancing boom that helped push profits to a record. In the second quarter, mortgage fees declined by a third to the lowest in more than five years. Chief Executive Officer Tim Sloan warned investors of “overcapacity” in home loans at a May conference.
The company is cutting in other states including California, Florida and North Carolina. The Orlando Sentinel reported earlier on the decision.
A notice filed with the Colorado Department of Labor and Employment Thursday showed Wells Fargo would be laying off 53 workers from its consumer lending and home equity fulfillment groups in the Colorado Springs area. They are being cut so the company’s staffing levels “better align with current volumes.”
“The (53) job eliminations announced yesterday are in addition to several team member staff reductions in various markets since the beginning of 2018,” Nicole Schwab, spokeswoman for Wells Fargo Colorado, wrote in an email. “We continue to adjust capacity within our lines of business to meet customer needs –- and to ensure we’re operating as efficiently and effectively as possible.”
The San Francisco-based bank is also navigating under a punitive growth ban from the Federal Reserve. Expense reductions to the tune of $4 billion by the end of next year and a shift to higher-yielding products such as credit cards are part of Wells Fargo’s strategy to boost profitability while growth is restricted.
The affected employees were notified of the cuts Thursday and will receive pay and benefits through Oct. 21, the bank said.
The bank doesn’t detail how many employees it has in its mortgage business. Companywide, it had a workforce of 264,500 at the end of June, making it one of the largest U.S. employers.
Denver Post reporter Joe Rubino contributed to this story.